Experts concerned over weak economic indicators

KARACHI: Experts on Friday voiced concerns over the weak economic indicators despite upbeat government estimates in the federal budget for the financial year 2021-22.

These views came to fore in a discourse, led by Dr S Akbar Zaidi, Executive Director, IBA, and Dr Ishrat Husain, Advisor to the Prime Minister on Institutional Reforms and Austerity and Professor Emeritus IBA, at the IBA City Campus.

Commencing the session, Dr Zaidi, elaborated the findings presented in the report titled ‘State of the Economy and the Federal Budget 2021-22’ organised by IBA Karachi, compiled by the Faculty of the Economics Department at the School of Economics and Social Sciences (SESS), IBA. It will be launched soon.

Shedding light on Pakistan’s economic situation during the pandemic, Dr Zaidi said that there had been growth in the economy, but it was improbable that it would be 3.94 percent.

He also said the ‘Investment-to-GDP’ ratio declined from 15.3 percent of GDP in 2019-20 to 15.2 percent.

“The Foreign Direct Investment (FDI) has decreased, and the Tax/GDP also went down from 12.6 percent to 9.6 percent. Moreover, remittances have increased significantly to $29 billion,” Dr Zaidi said. Briefing on the unemployment and inflation situation, he said that 21 million Pakistanis were laid off due to Covid-19 in 2020 and 2021, causing the unemployment rate to reach 25 percent.

“Food inflation has increased to around 13 percent to 15 percent for most of the year. Exports’ revenues are also stagnant at $25 billion. Growth target is 4.8 percent for the next year, while the inflation rate is expected to be 8 percent. Millions of households have been pushed into poverty as wages have fallen and the current economic and financial environment is precarious,” Zaidi said. Furthermore, he added that working women had been affected 17 percent more than men.